Travel insurance and natural disasters – what you need to know

If you get caught up in a natural disaster while travelling, it is important to know if you are covered by your travel insurance.

If you are affected by a natural disaster while travelling, you could face significant disruption or delays even if you haven’t been injured yourself.

Travel insurance plans very rarely extend their cover to these kind of events, although there are a number of other options open to travellers. Here is everything you need to know.

Why aren’t natural disasters covered by travel insurance?

Natural disasters can cause chaos to travellers whenever they occur. Aside from the physical damage that a tsunami, earthquake or flood can cause, the need to pay for new flights, extra nights’ accommodation and food can have significant financial implications for travellers.

But what exactly constitutes a natural disaster?

Typically these kind of events are defined in travel insurance plans as a flood, fire, hurricane, tornado, earthquake, volcanic eruption, blizzard or avalanche that occurs due to natural causes.

It's important to note that, in insurance terms, a natural disaster is defined differently from severe bad weather.

Natural disasters are rarely covered for two main reasons. Firstly, policies never cover ‘known events’. A known event is a forecasted storm, a named hurricane or a volcano eruption that has been predicted for weeks before. Essentially, these kind of events are known about in advance and since the main function of travel insurance is to provide financial cover for unexpected events, they are seen as incompatible.

The other reason is that many policies class natural disasters under the category of ‘acts of god’.

This phrase is often used in insurance contracts to describe large-scale, unpredictable weather events. Some kinds of natural disaster are so rare that insurers exclude them from their standard risk calculations.

Natural disasters therefore exist in a strange grey area of insurance. Either they are known events that you travel close to at your own discretion or, they are freak occurrences that are so rare that it would be unrealistic to cover them for every customer.

What insurance is available for natural disasters?

While it is unlikely that you will be able to get explicit coverage for natural disasters, some of the disruptive effects that occur from getting caught up in one can be covered by other policies.

If your trip is cancelled or interrupted, you may be covered under your policy. If a mandatory evacuation or official public evacuation order is issued due to a natural disaster, it’s likely you will be due this benefit.

This is also likely to be the case if the event makes your principal residence or place of accommodation is suddenly uninhabitable. If you are in the country to work and the natural disaster makes your working environment unsuitable or unsafe, you could also be covered.

These kind of benefits tend to have limits whereby they only apply if the traveller loses at least half of their trip due to being ordered (or strongly advised) to evacuate the area. Another important aspect to consider is the definition of ‘uninhabitable’ or ‘unsuitable’ being used here. Not being able to use the pool anymore is not going to qualify; we are talking heavy-duty damage that makes staying impossible.

Some types of coverage will protect you from incurring the costs of missing a connection or other costly effects of trip delays, such as a missed cruise.

Usually, the policy holder will be reimbursed for unexpected expenses and costs if they suffer delays lasting longer than a set number of hours. The vast majority of travel insurance policies have a cap on the maximum amount that can be paid out. If the natural disaster-induced disruption ends up costing more than that amount, you will have to pay the excess.

Volcanic ash cover

Anyone who remembers the Icelandic volcanic ash clouds that wreaked havoc on thousands of travellers in 2010 will remember the surprise among many that ash could cause so much disruption. Many people mistakenly assumed they were covered for delays caused by volcanic ash but ended up having to pay the full costs of the additional expenses they incurred.

The incident proved to be a transformative one for the insurance industry. Previously, you would have been hard pressed to find any mention of volcanoes in travel insurance policies. The travel chaos and widespread media attention that followed the eruption highlighted a glaring hole in the kind of insurance cover available to travellers. An eruption in Chile in 2011 went on to affect flights for weeks afterwards.

This example illustrates how important it is to examine your travel insurance policy in detail, especially the level of travel disruption cover it provides. Some might, for example, contain explicit mention of volcanic ash, while others may talk about ‘airspace closure’.

Need more information?

The experts at Admiral Travel Insurance can help you get right kind of travel insurance cover, whatever your plans are and whatever you encounter.

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Admiral Group plc is registered in England and Wales at Tŷ Admiral, David Street, Cardiff. CF10 2EH (Reg No: 03849958). Admiral Financial Services Limited (Reg No: 10255225) is a subsidiary of Admiral Group plc and is authorised and regulated by the Financial Conduct Authority (Firm reference number: 771862). EUI Limited (Reg No: 02686904) is a subsidiary of Admiral Group plc and is authorised and regulated by the Financial Conduct Authority (Firm reference number: 309378). These details can be confirmed by visiting the Financial Services Register, www.fca.org.uk/register. EUI Limited acts for, and on behalf of, other regulated insurance companies. Further details may be provided on request.